EU issues 1st social bonds to keep jobs from COVID-19 fallout

The European Commission has issued its first social bonds on behalf of the European Union (EU) as a fundraiser to help its member states to protect jobs against the economic impacts of the COVID-19, it said Wednesday, reported Xinhua.

The EU is sparing no efforts to safeguard livelihoods in Europe, providing financial support under "European instrument for temporary Support to mitigate Unemployment Risks in an Emergency (SURE)" to countries hit badly by the crisis, European Commission President Ursula von der Leyen said.

The loans will be used to cover the costs directly related to the financing of national short-time work schemes and other similar measures for the self-employed, the EU said, adding that the entire EU SURE bond of up to 100 billion euros could also finance some health-related measures.

The first issuance on Tuesday comprised a 10-billion-euro bond due for repayment in 2030 and a 7-billion-euro to be paid in 2040, the European Commission said in a press release, adding that with strong investor interest, both bonds were 13 times oversubscribed, resulting in favourable pricing terms.

With the issuance, the European Commission has made "a first step towards entering the major league in global debt capital markets," said European Commissioner for Budget and Administration Johannes Hahn.

So far 17 countries have applied for the financial support under SURE, and the terms on which the Commission borrows are passed on directly to those EU member states receiving the loans, according to the release.